House and Senate agree on $789.5 bn package

(from Financial Express)

Leaders of the Senate and House of Representative agreed on a $789.5 billion stimulus package on late Wednesday evening, following some hectic and intensified negotiations, thus setting the stage for its Congressional passage in the next few days.

"The difference between the Senate and House versions we have resolved. The bills were really quite similar. I am pleased to announce that we have been able to bridge those differences," Senate Majority Leader Harry Reid made the announcement at the Capitol Hill on Wednesday afternoon.

Obama can now hope to sign the American Economic Recovery and Reinvestment Act into law by President's Day on February 16, a self-imposed deadline set by him.

He was quick to issue a statement as the leaders of the House and Senate agreed to reconcile the two different versions of the bill.

"I want to thank the Democrats and Republicans in the Congress who came together around a hard-fought compromise that will save or create more than 3.5 million jobs and get our economy back on track," Obama said in a statement.

The country has lost as many as 3.6 million jobs since recession hit the US economy in December 2007. More than half of these job losses have been in the last three months.

HSBC sees Asia recovering first from global slump

HONG KONG (Reuters) - Asia should be the first region to recover from global recession, thanks to the consumption power of its growing middle class, Sandy Flockhart, Asia-Pacific head of banking giant HSBC said on Thursday.

"The bad news is we are experiencing a severe global economic downturn. Global GDP should shrink in 2009," Flockhart told a conference in Hong Kong.

"China and India continue to have high growth rates. The good news is that this region will be the first to recover from the crisis," he said, citing a growing middle class as one of Asia's stronger characteristics.

Flockhart's view contrasts with that of IMF Managing Director Dominique Strauss-Kahn, who said last week that Asia would not pull through the global economic downturn on its own.

Asian exports have plunged at double-digit rates in the past month as a result of weaker European and American consumer spending.

China on Wednesday reported an unexpectedly sharp 17.5 percent drop in January exports, the steepest decline since records began in 1993. Weak exports have pushed Japan, Hong Kong and Singapore into recession and economists say Taiwan and South Korea are heading for recession.

Economic development in emerging Asia, however, is boosting the number of medium-income households and the region is relying on them to spur consumer spending and offset the export slump.

Flockhart said sweeping measures by governments around the world to stimulate growth were positive moves.

China believes it can still achieve 8 percent economic growth this year, helped by a 4 trillion yuan (US $585 billion) fiscal stimulus package announced late last year.

India expects its economy to grow by 7.1 percent in 2008/09, a six-year low, and has also introduced fiscal measures, but Planning Commission Deputy Chairman Montek Singh Ahluwalia said this week that further stimulus would be needed to sustain growth.